Less than 10 days ago, the City of London became the first global market to sell Yuan denominated bonds, opening the Far Eastern currency to begin its move towards internationalization. Now on Oct. 29, the nation’s of Germany and South Korea are both rushing in to follow Britain’s move, and are paving the way for China to have Yuan bond hubs set up in these two countries.
The Yuan has been accelerating its presence as a global trade currency since the beginning of the decade, with an estimated 2.8% of all trade now denominated in this currency. And with the Yuan surpassing the Yen back in August to move into the number four spot in global currency use, its rapid acceptance is leading the IMF to recommend adding it to their Special Drawing Rights (SDR) basket of currencies, and provide it the necessary momentum to become a recognized de facto global reserve.
Germany’s Deutsche Borse Group has joined forces with the Shanghai Stock Exchange (SSE) and the China Financial Futures Exchange (CFFEX) to trade yuan-denominated products.
According to the German exchange, the project will start in November under the brand CEINEX and will be headquartered in Frankfurt. The management board will be comprised of senior officers from the three exchanges.
A supporter of China’s President Xi Jinping waves a Chinese flag opposite Big Ben in Parliament Square ahead of Xi’s address to both Houses of Parliament, in London, Britain, October 20, 2015. © Peter Nicholls Beijing issues first government bonds outside China
CEINEX will offer Chinese investment products to international investors, starting with cash market products like exchange traded funds (ETF) and bonds.
The new platform will become the first for authorized -denominated trading outside mainland China. – Russia Today
In addition to Germany’s sudden elevation of the Yuan within their markets, long time U.S. ally South Korea also appears to be seeing the writing on the wall, and is pushing China to setup their own Yuan based bond hub to propel themselves towards the top of China’s rising currency hegemony.
South Korea plans to sell the Chinese yuan-denominated sovereign bonds for the first time as it pushes to become one of the offshore yuan hubs in Asia, people familiar with the matter said Thursday.
The country’s finance ministry picked six arrangers last week for the issuance of the foreign exchange stabilization bond, a sovereign bond floated by the ministry to raise funds for stabilizing its foreign exchange market, said the sources who asked not to be identified as the plan had yet to be officially announced.
Seoul has issued the notes only denominated in the US dollar and euro, the outstanding sales of which were estimated at $4.4 billion and 1.6 billion euros ($1.8 billion), respectively. – China Daily
Like Great Britain in the 1950’s, the sun appears to be setting upon America’s domination of global finance, and in dollar hegemony. And with China finalizing its own SWIFT based system (CIPS) to allow currency exchange for their burgeoning trade pacts in and around the Asian sphere, it appears that it won’t be long before the Yuan surpasses both the Euro and the Pound in global trade, and completes its preparations for a direct showdown with the dollar and with the world’s polar global reserve currency.